Foreign firms will be given access to a £1.5bn loan facility from the
Government to boost their trade with UK companies.

In an effort to improve on Britain’s weak overseas trading performance, the Government’s credit agency, UK Export Finance, will provide individual loans of up to £50m to help international buyers access British goods and expertise.

The Government said the three-year facility will fund “export transactions where it has not been possible to obtain lending from commercial sources”.

It is hoped that the loans will be particularly helpful for small and medium-sized British businesses trying to sell high-value goods and services in emerging markets in Asia, Africa and South America, as they effectively guarantee payment for UK companies.

UK Export Finance is in talks with the banking trade body, the British Bankers’ Association, about how funding requests will be assessed and delivered.

In addition, the Government’s export agency, UK Trade & Investment, was given a 25pc increase in its budget over the next two years, worth £140m.

The move saw Chancellor George Osborne go back on a decision to cut UKTI’s budget in the Coalition’s 2010 Spending Review.

The extra funding is intended to tackle the UK’s trade deficit, which reached record highs in 2012. The Government reiterated its target to double UK exports to £1 trillion and get another 100,000 companies exporting by 2020 despite the stubbornly sluggish trade performance.

Clive Lewis, head of enterprise at the Institute of Chartered Accountants in England and Wales, said the additional funds were “much needed” to promote UKTI to small businesses.

“Our research shows that nearly 70pc of SME exporters are not aware of UKTI and the work that they do. Exports are vital for sustainable growth and new markets are crucial given the malaise in the eurozone.”

Mr Osborne said the investment will help more companies “build [British trading capacity] overseas, and maintain our country’s position as the number one destination in Europe for foreign investment”. It will also be spent in areas such as adding 'international trade advisers’ in English regions and helping small businesses pay for their first visit to overseas trade shows.